Saturday, July 13, 2013

Google drops one counterclaim and three affirmative defenses ahead of Microsoft FRAND trial

Close to midnight local time on Friday, Microsoft and Google's Motorola filed various documents in their FRAND contract case in the Western District of Washington, including their responses to each other's summary judgment motions. Google requested a summary judgment dismissing the whole case without the jury trial scheduled to begin on August 26. Microsoft moved for

partial summary judgment of breach of contract (it wants the court to hold Google's Motorola to have breached its FRAND contract, narrowing the jury trial to a damages determination) and

Microsoft has already achieved most of the second part. Even though Google's Motorola says that defenses can only be stricken but not adjudged on summary judgment, it has given up on some of its defenses as this footnote shows:

"Based on Motorola's understanding of the Court's June 6, 2012 Order (Dkt. 335), and without waiving any rights on appeal, Motorola does not intend to pursue the following counterclaim and affirmative defenses at the August 26, 2013 breach of contract trial: (1) Second Counterclaim – Declaratory Judgment That Microsoft Has Repudiated and/or rejected the Benefits of Motorola's RAND Statements; (2) Fourth Affirmative Defense – Forfeiture/Repudiation; and (3) Ninth Affirmative Defense – Failure to Satisfy a Condition Precedent. See Dkt. 68, 13, 14, 31-33. Furthermore, to streamline the issues and defenses at issue at trial, Motorola will not present its Fifth Affirmative Defense – Waiver. See Dkt. 68, 14."

So the fifth affirmative defense, waiver, is dropped entirely, and second counterclaim and two other affirmative defenses may resurface on appeal but won't have to be discussed at the trial.

The second counterclaim and fourth affirmative defense are duplicative. Motorola claimed that Microsoft repudiated its entitlement to a FRAND license by filing this FRAND contract action before making a counterproposal. But Judge Robart held that it must be possible to put a dispute over FRAND terms before a court of law.

The ninth affirmative defense is very closely related: Motorola claimed that "Microsoft failed to satisfy conditions precedent to any duty arising on the part of Motorola – namely, application, and a willingness to negotiate in good faith, for a [F]RAND license".

The definitively-abandoned waiver defense took this concept even further. Motorola argued that Microsoft had "waived any benefit that it otherwise would have enjoyed based on Motorola's [F]RAND assurances" by not applying for a license or engaging in "good-faith negotiations for a license" (just a reminder, Motorola's understanding of "good-faith negotiations" is negotiations at the threat of injunctive relief over FRAND-pledged standard-essential patents, i.e., a scenario in which the patentee is the dictator of the royalties).

Google is far from backing down. It still has various defenses and counterclaims in play. But its decision to drop one defense entirely and reserve some others only for an appeal does narrow the issues for Judge Robart's summary judgment decisions and, especially, for the upcoming jury trial.

In aother respect Google pursues the opposite of narrowing the case. In its response to Microsoft's motion it alleges that Microsoft itself sought injunctive relief over FRAND-pledged standard-essential patents against Motorola. But this just appears to come down to diversionary tactics. For one of the patents, related to file names, it appears that the FRAND promise extended only to members of an organization (which Motorola wasn't at the relevant time) as opposed to all comers. For another patent (the one that is at issue in an enforcement-related Microsoft lawsuit against U.S. Customs & Border Protection) I never saw Motorola raise a FRAND defense -- it just conceded infringement and disputed (only) validity. At first sight it appears that the way Google's Motorola uses the patent in Android does not fall within the scope of any FRAND promise for technical reasons. That said, it's clear now that Google plans to hurl accusations of this kind at Microsoft in front of the jury.

The parties will file their reply briefs reinforcing their summary judgment motions on Wednesday, July 17. The summary judgment hearing is presently scheduled for July 31. Even before the summary judgment rulings, Microsoft has made some headway because Google's Motorola gave up on parts of its case, at least with respect to the upcoming trial.

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About Me

Florian Mueller is a former award-winning intellectual property activist with 25 years of software industry expertise spanning across different market segments (games, education, productivity and infrastructure software), diverse business models and a variety of technical and commercial areas of responsibility. In recent years, Florian advised a diversity of clients on the patent wars surrounding mobile devices, and on their economic and technical implications. (In order to avoid conflicts of interest, Florian does not hold or initiate transactions in any technology stocks or derivatives thereof.) He is now developing a game app for smartphones and tablet computers.